Brand Extensions - Meaning, Types, Advantages, Strategies, Importance, and Tips

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Brand Extension refers to the strategy of an organization to use its existing brand name for either a new product category or a product.
The concept of Brand Extension is often used in marketing to take advantage of an established brand name and create instant visibility for the new product or category.
Examples
1. McCafe is the brand extension of McDonald’s
2. Diet Pepsi is the brand extension of Pepsi
Brand Extensions fall into Two Categories
Line Extension
Line Extension is the addition to a specific brand’s product line in a similar category to boost market acceptance.
Examples
1. The Brand Extensions of Armani are Giorgio Armani and Emporio Armani
Category Extension
Category Extension refers to the strategy of using the same brand for a completely different product category to improve market visibility.
Examples
1. The Category Extensions of Apple is seen in various products into the watch commodity category
Strategies for Brand Extension
- Launching a similar product in a different style.
- Launching new products that have the brand’s unique properties.
- Launching a partner brand.
- Launching a product connected to the franchise of the brand.
- Launching a product that will benefit from the unique brand influence.
Advantages of Brand Extensions
To the Extended Brand
- The expectations encourage brands to launch good quality extensions and this improves brand image.
- A new product is directly aligned to the existing brand image and this helps to minimize the risk.
- Boosts the chance of customer demand and ultimately leads to expansion in distribution.
- Minimizes the effort needed for promotional investments.
- Identical or a similar type of packaging cuts down expenses.
To the Parent Brand
- Boost the brand image of the parent brand
- Increased market coverage
- Boost the interest in the parent brand once again
Disadvantages of Brand Extensions
- Can create confusion
- Chance of resistance from the retailer
- Risk of hurting the parent brand image
- There is a chance of extensions finding success at the cost of products from the parent brand.
This video is on Brand Extension and it has the following sub-topics.
Time Stamps
0:00 Introduction to Brand Extensions
00:53 Brand Extensions fall into Two Categories
00:58 Line Extension
01:24 Category Extension
01:45 Strategies for Brand Extension
02:43 Advantages of Brand Extensions
02:49 To the Extended Brand
02:54 Improves Brand Image
03:17 Decreases Risks Perceived by Customers
03:44 Increases the Possibility of Expanding the Distribution
04:05 Increases Efficiency of Promotional Investments
04:35 Packaging or Labelling Advantages
04:51 To the Parent Brand
04:55 Enhances Parent Brand Image
05:19 Increases Market Coverage
05:49 Revitalizing the brand
06:07 Disadvantages of Brand Extensions
06:11 Can Confuse or Discourage Consumers
06:27 Can face Retailer Resistance
06:56 Possibility of Failing & Hurting the Parent brand image
07:34 Brand Extensions Could Succeed but kill the Sales of the Parent brand

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